The Real Property Amendment (Certificates of Title) Act 2021 came into effect a few years ago, property owners have no longer had access to paper certificates of title.
The land titles system states that all Australian states and territories must issue electronic copies of a title. So, now you need to know how to read your new electronic title certificate. Let's get straight to it.
What Is A Certificate of Title?
First, you need to know what is a title certificate. A title certificate is a legal document that the state government or municipal issues. This official record contains vital information about a property or parcel of land.
Most importantly, a certificate of title includes evidence that proves your ownership of a property. For that reason, title certificates are vital to any title searches you may want to conduct. You can go to any authorized information provider or your title office to run these searches, too. After all, they are responsible for recording and registering interests in any piece of land.
The Importance of Electronic Title Searches
Why would you run a title search in the first place? Well, with the data in the Torrens title system, you can see the chain of ownership of a property you like.
You can then determine the following:
- You can see all of the previous owners of the property
- You can make sure that the seller has the legal right to sell the property
- You can reveal any encumbrances like covenants or easements that you didn't already know about
- You can check for any financial or legal issues that could affect the land or the property due to its previous owners
- You can ensure that the land description of a piece of land is correct
- You can check the last transfer document number (if you obtain a copy, you can usually expect to see the last recorded sale price)
Ultimately, the importance of title certificates and title searches is something you simply can't ignore.
The image above is an example of a certificate of title. We'll use it to answer the most common questions our users ask. Hopefully, we'll answer your questions below, but feel free to get in touch if you have any more queries!
Where Is The Current Owner Shown?
You can find the current owner/registered proprietor in the top half of the certificate of title.
It's under the header titled 'FIRST SCHEDULE'.
What Is A Folio Number?
A folio number is a unique identification number that helps people keep track of their investments or properties.
Given that a folio number serves the purpose of identification, it does three things. On the one hand, it describes the property and records who owns the property. On the other, it provides details about mortgages and rights that may affect the property.
What Is A Dealing?
Dealings occur when solicitors or members of the public send documents to Land Registry Services (LRS) for registration. After the LRS receives this application, it will assign it a number and a file called a 'Dealing Case' or 'Application'.
What Are Encumbrances?
An encumbrance is any legal interest, burden, right, or claim that gets in the way of you being able to use or transfer a property. Of course, someone who isn't the property's owner makes these claims. Usually, the types of encumbrances that property owners have to deal with are liens (like mortgages) and limitations (like easements and covenants). But if you hear the term 'encumbrance', you need to know exactly what you're dealing with.
Let's look at some of the most common encumbrances in more detail.
Easements
An easement is a right that a landowner grants a third party. This right gives the third party the ability to enter and use their land or property for a specific purpose. A classic example of an easement is a shared driveway. That being said, certain statutory easements are not registered on your title.
These types of easements often include things like power, telephone lines, or drainage easements.
Liens
Liens are legal rights or claims against a property or its assets. With liens, individuals or organizations can sell the property or its assets if the debtor fails to meet the obligations of a loan contract.
But liens aren't always a source of dread. Since they are part of the public record, they provide security to creditors and others who express interest in a property. In other words, they'll let you know about any existing debts that are attached to a property.
Leases
Leases allow tenants to agree to rent a property for a specified time and usually for a payment. Needless to say, the tenant doesn't own the property that they rent. The lease enables the tenant to have exclusive possession over the land or property they rent. If a property is sold with a tenant who has a current lease, then they can occupy the property until the lease expires.
Please note that commercial leases are usually registered on title, whereas residential leases aren't.
Covenants
In the context of property and land, covenants are a set of rules that tell an owner what they can and can't do to the property/land. So, if you purchase a property or piece of land with an attached covenant, you agree to obey its rules.
A good example of a covenant is a rule that states you can't make any alterations to a property without explicit consent.
Tip: You can find all encumbrances in the section that’s titled "SECOND SCHEDULE".
Reading Your Certificate of Title: Final Thoughts
We hope that you feel more confident when reading electronic title certificates after reading this article. If you're unsure of any encumbrances or caveats that could be attached to your property, don't leave it to chance. Get in touch with your local solicitor, who can provide you with the information you need to proceed. Once you're happy that your property is encumbrance-free, consider conducting your land title searches with the Title Check.
We’ll help you find every crucial detail about any property you’ve taken a shine to. Happy searching!
